How Do You Tally the Real Costs of Walmart’s Low Prices?

A new report says the chain is falling short when it comes to labor and environmental sustainability.

(Photo: Robyn Beck/Getty Images)

Jun 5, 2015· 2 MIN READ
Jason Best is a regular contributor to TakePart who has worked for Gourmet and the Natural Resources Defense Council.

Oh, what a tangled web Walmart weaves. It’s hardly news that the combination of low, low prices and the convenience of one-stop shopping that has made the company the largest retailer in the world has often come at a high social and environmental price—but how high a price, exactly? A new report from a coalition of labor groups proves just how difficult it is to calculate the impact of Walmart’s decades-long experiment in cost-cutting.

Walmart at the Crossroads: The Environmental and Labor Impact of Its Food Supply Chain is a noble effort. Compiled by the Food Chain Workers Alliance, the 115-page report, complete with more than 460 footnotes, seeks to expose the retail giant as, essentially, a big old hypocrite. “So far Walmart’s commitments to improving standards appear to be mostly a public relations stunt and haven’t translated to improvements in conditions for most of its food supply chain,” the authors write.

At root, according to the report, is a wide discrepancy between the company’s official standards for how it and its vast network of suppliers should operate, in terms of things like fair labor conditions and environmental stewardship, and reality.

In essence, the report charges that the official standards are more or less like your average employee handbook: “required” reading that just gathers dust.

Instead, it’s Walmart’s relentless focus on driving down costs that dictates the rules by which its suppliers must play. “The price limitations imposed by Walmart create incentives to cut corners, rather than establish high standards, in order to keep Walmart’s business,” the report states.

The company did not respond to a request for comment.

It might seem that Walmart would be an easy target. It’s big enough: more than 11,000 stores in 27 countries, with a new one built about every eight hours. In the roughly 25 years since it opened its first supercenter, the retail juggernaut has come to dominate the grocery business: Nearly $1 out of every $4 that Americans spend on groceries is spent at Walmart.

Therein lies the challenge: Where do you begin in taking on such a sprawling enterprise?

The Food Chain Workers Alliance report raises a host of troubling issues, from the unfair labor practices of the companies that supply Walmart with its fresh produce to the retail giant’s fostering of corporate consolidation in spite of its much-publicized commitment to support more small and midsize operations. Just two bread companies account for nearly 50 percent of the overall bread market in the U.S., for example, and these count as Walmart’s primary bread suppliers.

There’s the story of one farmworker at a Walmart supplier who says he and his fellow workers were ordered to pick 65 pounds of blueberries in a day—or else. “Workers could not afford to go drink water or even go to the restroom because of the tremendous fear of losing their jobs,” he said. Abel Mendoza, a worker at another supplier, this one for packaged salad greens, said that after he slipped from a machine and crushed his foot, he was fired. “Perhaps the most disturbing part of Borja’s story is that this termination did not surprise him,” the report’s authors write. “He said his first thought after his fall was that he was going to be fired because he had seen co-workers suffer a full range of injuries, ‘and one thing always happened. If they reported it, they would get fired.’ ”

That’s the overwhelming—and frustrating—effect of the report at large: a sense that what you’re reading is just the small tip of a much bigger iceberg of violations unreported, fines not levied, and pollution discharges swept under the rug. And the world’s largest retailer working behind the scenes to keep Americans hooked on everything from cheap bananas to cheap boneless chicken breasts while never revealing the true cost of it all.